To link to the entire object, paste this link in email, IM or documentTo embed the entire object, paste this HTML in websiteTo link to this page, paste this link in email, IM or documentTo embed this page, paste this HTML in website

State ile Jo'ttrttitL VOLUME XXXI. COLUMBUS, SATURDAY, MARCH 20, 1841. NUMBER 41; REPORT OF THE MINORITY OF THE COMMITTEE ON BANKS AND THE VUURENCY. In SitiiTt, Thursday, Mabch 11, 1841, Mr, Vakci, from the minority 0 the committee 011 Duika and the Currency, made the following report : The undersigned, members of the committee on Banks and the Currency, ask leave to report: That they entered upon the duty assigned them with their fellow-members of the committee, with 8 fixod determination to concede to others differing with them, everything, when such concession did not require the surrender of principles of vital importance, and in a spirit of becoming dofcrence to such arguments as might be offered to convince them of errors, from which they did not presume to hold themselves more than others exempted. The great importance of the subject, was well calculated to create diffidence, and distrust in opinions previously formed, when the mind was left to its own speculations, unassisted by the light of long experience; and the public demand for prompt and decisive legislation, furnished a controlling motive to sacrifice all minor differences of opinion to the end of establishing by law a safe and practicable system of banking. The undersigned were farther prompted to an eager desire for safe and harmonious action on this subject, by theconsideration that the present condition of our country, more than at any former period, invokes a spirit of true and unbiased patriotism to its relief. The subject which the Senate has confided to the committee on Banks and the Currency, has been, in almost every State in the Union, a prominent topic of discussion, and in many instances has, in its various aspects, formed the question on which political parties have been divided. In the angry controversies of political partisans, it was impossible to govern the contest, nt all times, by the calm judgments of the understanding. Extremes prejudicial to the abiding interest of the country, in our opinion, have often characterized legislation upon this subject, which, perhaps, of all others, should be, for the benefit of the country, least subject to change, and especially to change of a sudden character to which, in the nature of things, business operations, and the labor and production of the people, could not be made to accommodate themselves without great and inevitable loss. In the progress of the public discussions which the question has undergone, every theory of currency, and every question of political economy in the remotest degree associated with it, have been reconsidered, and the grounds on which rested principles that have been the basis of legislation and policy to the most enlightened nations of modern times, have been questioned with freedom, and in many instances, with that stubborn self-will which is but too often the characteristic quality of wild, empirical speculation, regardless of facts, and uninformed by the teachings of experience.It has even been assumed, that the interest of a State or community, in the present condition of the world, would be promoted by the destruction of all credit, whether furnished by Banks or indi viduals; that we should go back to the barter of one article for another, which the necessities of an infant or barbarous state of society impose or at all events, the sale of commodities, and the exchanges of commerce, should be effected only through the medium of the precious metals. This latter, while left to work its way to tho minds of the people as theory, has not wanted advocates of greater or less pretensions to legislative sagacity. In the opinion of the undersigned, it is the slight approximation to the realities of this theory in practice, that has brought the people of this State, without distinction of party, to unite in the general wish for a safe and liberal system of credit, having for its medium Hanks of circulation, guarded by such restrictions as past experience has shown to be useful. The notion that Banks of circulation have the direct and inevitable effect of banishing from the country the universal measure of value, gold and silver coin, has been often propagated, with a sincerity and vehemence which carried to superficial thinkers a conviction of its truth. However plausible tho arguments at first view may seem, which tend to prove this assumption, it is only necessary to survey slightly the grounds on which they rest, to see their fallacy. It will not be denied that coin, whore it is not furnished from mines at home, must be brought in by trade with those portions of the world where it can be had in exchange for other commodities nor will it be controverted, that trade, and the production ot commodities Tor sale, are not merely promoted, but actually brought into life by the use of money, either in the shape ol the precious metals, or by some other common representative ol value. The extent of the production arising from labor, in any country where there are no disturbing in fluenccs, will in general be lound to be measured by tho amount of money whjch is in tho country employed in rewarding labor and facilitating the exchango 01 its production. In any country, therefore, when from any caiiso the metallic currency is dchcicnt, and that deli ciency is not aided by paper of good crodit, labor, failing to find its proper reward, ceases to produce, commerce by consequence languishes, nnd the export trade of such community will inevita bly fail to meet its imports. On the other hand, when a deficient metallic currency is supplied by a paper credit well foundud, activity is given to trade, labor is stimulated, production of commodities for sale is increased, and these last, being carried into the commerce of the world, return in the shapo of the precious metals to the extent re quired for the convenient transaction of commer cial business. Taking into view, therefore, these facts, it may bo safely assumed that the quantity of money which any pcoplo shall possess, in general will be measured by the amount of their production compared with their consumption, and the aid which a free and full circulation shall give to the productive powers of the country. If, then, in our country, we are to look to trade and com morce for the precious metals, and admit, what seems to be incontrovertible, that Hanks and credit are, if not actually indispensable, at least in geno- ral tho only practicable agents of trade, we are led to the conclusion that Banks of discount and circulation, instead of banishing coin from the country, rather invite it; and when, from unfavorable balances of trade with foreign States the amount of coin is reduced below the healthy standard, Banks, by stimulating industry, and giving uuuvuy 10 dusiiicsp, cxeu a must import out agency in restoring such balance, and bring' ing back the precious metals, through that com morce which they create and carry on. It has been one of the ureal objections to Banks with some, that the facility with which credit is obtained from them, gives scope to a spirit of wild speculation, and an adventurous and hazard ous trade, productive of bad results to the business and morals of society. To this it may at once be answered, that the same credit furnished by individuals, would produce the same results: and it may be added with truth, that Banks are not more prone than are isolated individuals, to extend credit to the reckless, or furnish means ol enterprise to the unworthy; on the contrary, as the whole business of banking, and its success, is dependent on the punctuality of its customers, Hanks, from an obvious necessity, are taught to look narrowly into the business character and prudence of those lo whom they give credit. 1 he data lrom which the loregoing objections are derived, are to be found chiefly in the history of Banks in the West and South-west during a period of twenty-five years past. It must be conceded by every one even superficially acquainted with the nature and use of such institutions, that they, being the offspring of trade and tho helps and handmaids of commerce, could not exist, with a safe and profitable business, in a country newly settled, with a sparse population, engaged almost exclusively in agricultural labor, the products of which would be mainly consumed by the pro ducers and emigrants, whose wants were of course supplied by the limited productions of their newly adopted country. It cannot be denied, too, that the safeguards and necessary restrictions on banking business, have been too often overlooked in the establishment of these institutions in the West and South-west; and above all, the imper fect notions of a people so little acquainted with the nature of trade, either in money or commodities, would lead as well to multiplication of Banks beyond the wants of an infant community, as to an insecure and hazardous course in their management. Hence it will be found, that the losses so often computed and greatly magnified by either the total insolvency of Banks, or by the depreciation of their paper in times of total or partial suspensions of specie payments, have occurred chiefly in the West and South-west, and exactly in those places where population was not dense, and where, by consequence, capital had not accumulated to any considerable extent, nor trade as yet found healthy, constant and active occupation. Thus it will be found that the losses of the United states Hank, from the year 1817 to the year 1837, were not quite two-thirds of one per cent, per annum, and that three-fourths of the whole loss occurred in the first four years of its existence as a Bank, one fourth part of which was in the states of Kentucky and Ohio. When we look, however, to the older portions of the Union, whero capital has accumulated, trades have multiplied, and the pursuits of the people become more diversified, so as to require constant and active exchange of commodities, we Una a very dillcrcnt result. Taking nine of the older Slates, including New England, New York, New Jersey, and Pennsylvania, with a Bank capital of seventy-two mil- ions of dollars, from the year 1811 to 1 8:10, the losses by Bank failures, including losses by stock holders, is, it is believed, truly estimated at one half of one per centum per annum on the capital employed; which, including a portion of the capital of the United States Bank, is estimated at seventy-two millions, as above stated. If we throw out of tins computation, the losses which fell on stockholders, it is computed that the entire loss to the bill holders, depositors, and holders of drafts and checks, during the period above stated, did not, in the nine States mentioned, exceed ono four hundredth part of one per cent on the amount. From which it follows, that the risk in such business, in the States abovo mentioned, was, for a period of about twenty years, about equal to one dollar in every forty thousand. When we learn from the same sources, that the losses of Banks by failures of individuals dealing with them, have been much greater than those of individuals from the Banks, it should furnish us with some instruction on the much contested point of the relative safety and punctuality of corporations and individuals. If tho foreeoinir views arc correct, It will fol low that the past history of banking in the West and South-west is no criterion by which to deter mine its future results and usclulncss, but only furnishes the great and important fact for consideration; that is, that in Ohio at least, we have advanced from a population of 1 few thousand, scattered over the whole State, all engaged in agriculture or in a very few rude attempts at the mechanic arts, to a population of more than a million and a half, with pursuits covering, to a limited extent, most of the useful and many of the ornamental branches of manufacture; and by our agricultural productions, furnishing nil tho staple articles of our own subsistence, and an annual surplus for export, which, at the lowest esti mate, does not fall short or twenty millions or dollars. When it is remembered that within a period of the last fifteen years, Ohio has expended fifteen millions ot dollars on canals and roads, all de igned to facilitate tho transportation of her own productions to market, ns well as to cheapen tho cost of commodities imported to her consumers, and some of theso great highways of trade are at this moment producing to tho Slate 0 per cent, per annum on their cost, it will at once bo perceived that our condition has totally changed within the last twenty years, and is rapidly assimilating to the character of those commercial States where Banks have profitably existed as the necessary agents or business, and been conducted with perfect security to the public. Another, and in the opinion of the minority of the committee, a most conspicuous proof of the improved capacity of the State for managing and sustaining banking business, is to be found in the history of our Banks for the last four years. 11 is well known that a suspension ol payment by the Eastern Banks in 1837, was followed by a similar courso by the Banks of Ohio; that when the former resumed payment in 1838, Ohio followed with prompt alacrity by tho payment of all demands in specie. When another suspension took placo in the East and South in 1830, our Banks in Ohio, as a measure of necessary self-defence to themselves and tho pcnplo, wero inclined also to suspend. At this point, the legislature interposed, and denounced tho forfeiture of charter by a very rapid process, and a sudden transfer to agents of the law of all the effects of the Banks which should refuse to redeem their notes with specie on demand. By another lnw, heavy penalties wero imposed on all such Banks as should fail to keep on hand one dollar in gold or silver for every three dollars of their notes in circulation. Thus the Banks of Ohio were compelled by their own Legislature to rcdeom their own notes with specie, while the Legislatures of the adjoining States would not permit them to enforce the same eoure upon Banks within their respective jurisdictions. Ctrey on the credit ijitem of Frtnce, Greet Britain ml w united sutei, p. so. The inevitable result of this State of things was to raise Ohio Bank notes to the value of spe cie; to drive them out of circulation, and through Collectors and Brokers, to force them in upon the Hanks, to draw from their vaults a corresponding amount of specie, which took its way to those States around ns, from whence our own Banks and citizens holding the paper of those Banks, could obtain no specie in return. This process (forced on bur Banks by the joint operation of the two laws above adverted to) reduced our Bank circulation, in one year, from (8,300,1-11 80 to $4,600,080; and the specie in the vaults of our banks, in the same time, from 92,002,642 10 to 1,355,500 17. I he prejudicial influence of these laws upon the interest of Ohio, is too palpable to require a moment's consideration, and their injustice too plain to need an illustration. So apparent is this view of our policy to every reflecting mind, that those differing most widely on every other topic connected with public law, agree in their deep and decided condemnation of this. Our citizens and Banks are compelled, under heavy penalties, to pay their debts to neighboring Slates in coin, while we hold claims against them, it may be for a corresponding amount, which they, at the moment of receiving payment from us, tell us they will not pay. Such policy, if applied to the dealings between man and man in our own State, would compel one man to pay a promissory note to another while- holding that other's promise for the same sum, and yet protect the latter from any enforcement of his engage ment. What man in business could abide the requirements of such a law? The feelings of patriotic indignation, inspired by this suicidal policy, have been expressed in strong and em phatic language by the present Bank Commissioners of Ohio, seeing our own citizens pushed naked and unarmed into this war of capital and enterprise by our own Legislature, while those of other States are protected by their respective Legislatures with every shield their laws could invent. The Bank Commissioners declare that, by our own policy, we have "rendered Ohio the common plunder ground for those who were purchasing specie or making collections in the 11 estcrn states," let, under all these disadvantages, the Banks of Ohio have maintained, in general, a good standing, and at this moment, with few exceptions, enjoy the entire confidence of the people; yet it is obvious that in the end great sacrifices must be made to sustain the unequal conflict in which they are engaged. It is a fact well ascertained, that capitalists in other States collect the Bank paper of Ohio, and favored and invited by our laws, come to our Banks and make demand, so that they may re ceive the twelve per cent, penally for non-pay. incut, as this is obviously a higher rate of inter est than could be obtained on any investment in their own State, while the operation is attended with no hazard whatever. We, on the other hand, are by such a policy deprived of the circulation of our own Banks, and in its stead have the circulation of the Banks of other States whose laws lcgnlizo a suspension; and if our citizens bring suit against the Banks of such States, they have only tho common rate of interest at the end of the litigation. W 0 repeat that the good condition of tho Ohio Banks, under such unfavorable circumstances, furnishes the strongest evidence that Banks, properly organized, can be safely relied on for a safe and sound currency in Ohio, and we cannot refrain from expressing a hope that the present session of the General Assembly will not close without the adoption of some provision more equitable towards our own institutions, than the existing laws afford. After a careful consideration of the present con dition of the State, thecommitteo feel deeply im pressed with the necessity of adopting, with all practicable promptitude, a sound system of cur rency in Ohio. This system, to be useful, must be such as will offer sufficient inducement to capital to seek investment in it, while it must also offer suffi cient security to the public that it will maintain a good currency , for the uses of the people. The great contraction which has taken place within the last year in our circulating medium, has obviously operated to reduce the price oflabor.aa well as the market value of every production of the State. We have a State debt ot 913,100,172 already, the interest on which must be paid to its holders abroad semi-annually; this interest must be rjiscd by the tolls on our canals, and by direct taxation on the people; theso must bo produced in the shape of money, and this again must be raised by labor and by property. The amount of tho labor or property which shall pay this debt, therclorc, depends on the high or low prices which a large or small amount of money in the State shall estab lish as the value of property and tho price of la bor. Thus any considerable diminution in that currency which is received for taxes, by dimin ishing the price or that property or labor which is the only resource of the people, has the direct effect to increase the public burthens. If a bushel ol wheat, when the currency ol tho Stale was abundant and good, paid one dollar in taxes, then it is obvious that the great diminution of the money in circulation which has brought down the price of wheat to fifty cents per bushel, while it doubles the burthen of taxation to the tax-payer, has not at all increased the fund which is to pay our foreign debt. So that in this process or re duction of the currency, the people feel all tho oppression of a double tax, while, in fart, the Treasury is not benefited by the change. Hence, instead of adopting any system which looks to a further contraction, or in any manner approach to an exclusive metallic currency, tho minority of the committee have been impelled by every mo-live of patriotism and every consideration of pub- lio duty, to endeavor to present a bill which would inspire a fccline of security as well to the holders of slock in the Banks as to the holder of their notes; and thus refill the exhausted chan nels of circulation, and reanimato that confidence which will repel the spirit of hoarding and bring into active use all tho capital ol the country. To accomplish this great object an object not less the common desire ol every member 01 tne Sonato than it is tho imperious demand of Iho people of the Stalo we sought anxiously through tho various bills referred to the committee, for a system answering lo tho end proposed. After careful ond anxious comparison of the four bills committed, in all of which there are many salutary provision, we have been compelled to givo the preference to the bill coming from lhc4 House of Representatives, with the amendments proposed, which, while they do not alter the main and prevailing characterises of the bill, arc, in our judg ments, nevertheless well calculated to improve the system. The bill we propose, while it gives the State a present interest equal lo one twentieth pari 01 hip whole stock, and power to own, when it shall Btnk CommiiiioDen' Report, December, 1840, p. 8 k J. be convenient, an amount equal to one fourth part of the whole, provides, also, a safety fund, and thus unites the two characters of the "safety fund" and State Bank in the same plan. This, in our judgments, alone gives the bill we propose a decided preference over any other system or bill which the committee was called on to consider. The minority of the committee have no doubt that they have consulted not less the dictates of prudence than the universal wishes of the people, when they consider the security to bill holders as a primary and all-important feature in any well constructed system of banking. This great end being fully attained, it is obvious that it will, if not directly, at least incidentally, have the effect to give stability to business and secure the community against unnatural fluctuations. Whatever means shall operate to make the notes of the Banks good at the expense of those who issue them, will also superinduce a degree of circumspection, and insure a greater degree of fidelity in the management of the Banks thus liable. The bill now proposed, raises, in the first place, by levy on all the dividends of the Banks, a safety fund, which, judging from the past in general, of itself will be sufficient to meet any demand likely to arise for the payment of the noles of a failing branch. In the second place, it holds pledged for the redemption of the bills of a broken or suspended Bank the entire Bank capital of the State. Thus every Bank in the Stale being liable for tho issues of every oilier Bank, is, from motives of interest, constituted a sentinel to watch the business of every other Bank; and on the first appearance of mismanagement, will be prompted by the strongest motive that of self-protcclion to tako instant and ellcctive steps to check such misman agement. The process by which this remedy is allorded, as will be seen, is simple and summary through the Board of Control. In this way, every bill holder will know that he has the security of not less than ten millions of dollars for tho redemption of every note of either of the Banks, which he may hold. It occurs to us, that so largo a sum pledged for this purpose, under the supervision of a Board of Control part of whom will be elected by the Repre sentatives of the People, with the additional guard of legislative scrutiny whenever the General As sembly shall deem it proper, oilers a more permanent and effective security to the public than any plan yet adopted especially when taken in connection with the safety fund, as provided by this bill. If a Branch shall at any time fail, through ne glect in management or from fraud, the holders of its notes can, by this bill, compel their receipt 111 payment of debts to any other Branch, and the Board of Control are bound to place funds in a situation to take up all the outstanding noles of such Branch. The Board of Control, issuing all the paper, can always know what amount has been placed in the power of each Branch; and their report, to be made to the Legislature, will give full information to the people of the condition of every Branch of the entire system. When the bill now proposed shall be examined in all its parts, in reference to the ultimate security it affords to the holders of bank notes of any of the Branches of this system, it must result, it would seem, in a convic tion, that this great end of security to the public is accomplished with as much certainly as is at tainable in human affairs. It will be seen that no Branch, in the first place, can issue or circulate as money any note which has not been issued and lurmshed to such iiranch by tho Hoard or Control. The condition of each Branch being thus known to the Board of Control, unless the latter proves faithless to itself and the country, it will follow that the issues of the Branches will be confined within prudent and safe limits. The Board of Control we propose is, it is believed, so constituted as to insure both the knowledge and fidelity requisite to a proper discharge of the high duties assigned to them. Four of the Board are to be elected by the Brunches, and they, of course, ill be selected for their experience and know ledge in tho business over which they are to preside. As the currency is a matter of interest to every citizen, and of great and paramount public concern; nnd as the paper of the Branches is to be received everywhere in the State in the pay ment of taxes, unless otherwise directed by law, it was thought advisable to give the public, as such, a representation in the Board; and accord ingly, three or its members are to be elected by the General Assembly, in the manner pointed out by the bill. This last branch of the Board of Control will, of necessity, feel tho responsibility resulting from the nature of their constituency they will be the chosen of the people, to guard and protect them against every movement which the Banks might make from a desire to increase the profits of their business, or which might tend to endanger the currency, in which all have a common interest. If, however, this should fail to exert its proper and legitimate inlluence, the ever wakeful vigilance of the Legislature is provided with the ready means of correcting tho evil, by a scrutiny into the conduct of holh the Board of Control and the Banks, at any time, whenever suspicion might suggest its propriety. To insure a prompt exercise of this power, semi-annual reports, made under oath, of the doings of the Banks, are to he published; and these, it is not doubted, will furnish, as well to the friends of a good and well-secured paper rurrency as to those who from other motives may choose to look narrowly into their doings, full and ample means of awakening public attention to any mismanagement of their affairs. It is believed the limitations placed upon tho issues of the Banks, based upon the proportions fixed in the bill which their present nvnilablo means shall bear to their circulation, are safe, even according to the standard of those least favorable to a paper circulating medium. The condition of the Banks, in this respect, will at short intervals be laid bare to tho public eye; and in raso of any departure from the law, or the charter, in this respect, a personal responsibility is imposed upon the Directors under whose management such infraction of the law occurred. In addition to all these guards, accumulated thus far to 1 point, in quantity and severity, it might ba supposed stiffi-ricnt to satisfy the most timid disposition, or even those most anxious for the infliction of penalties upon either negligent or fraudulent delinquency, we have the superadded security of every Baiik in the State pledged for the redemption of the notes of every other Bank. This alone, it woi Id seem, would furnish am-plo security, unless the separate owners of the stock of some forty or fifty branches all combine to sacrifice their property, to the amount of at least ten, and probably fourteen millions of dollars. We have hero not merely the individual liability of the stockholder, but we have the security of a second person not at all interested in failing Branch, and pledge of his to an amount greater than any individual responsibility of the stockholders of any particular Branch. Thus it will be seen that the present bill, while it does not in the manner sometimes proposed introduce the principle of individual liability, does what in our judgment is the same thing, in a much safer and more equitable way it compels the stockholders of every Bnk iii the Slate to pledge all the stock they own as security for the good conduct, and the redemption of the bills, of the neighboring Banks; in which latter these sure-lies have no interest whatever, but over which, for this reason, through the common Board of Control, they are authorized to exert a salutary and only conservative power, very much like that which in law a surety may exert over his principal. However salutary might be the doctrine of individual liability of the stockholders, it will be seen at once that in a system like this it would not only be useless, but, if applied at all, it would operate with great injustice. The stock of each Branch being separate property, if the individual stockholders of a failing Branch were made liable, such liability could have no other effect than to compel individuals to reimburse to the Banks, (who by the bill are bound lo redeem speedily the notes of such failing Dranen,! tne money advanced lor that purpose. It would be a guaranty to Banks who are security for the failing Bank, and that guaranty too, in general, would fall upon individual stockholders wno had had no agency in producing the failure. Thus, afler a Bank had failed, and the other Banks, as is provided in the hill, had redeemed all the notes of the insolvent institution, the public is 'tisfied, no one has lost anything except me siocKnoiucrs 01 tne tailing Hank and the other Banks who have paid its debts. If, then, the individual liability of the stockholders of the failing Bank is enforced, it could only be to pay to the other Banks the amount which they had been compelled to advance. The particular class on whom this payment would fall, for the benefit of the surety Banks, we may con jecture with some approach to certainty, in the Knowledge we nave ol the many aged men, widows, trustees, guardians, and minors, who own stock in Banks, and who seldom have any active agency in their management. We have no particular or certain data on which to found an opinion upon this subject, but, from the best in- lormalion we have been able to obtain, there is at least one-half of the stock owned in the Ohio Banks, that belongs to females, minors, retired. and aged persons, who have not the least agency in cunuuciing uieir ariaira. If the foregoing be a tnie statement, and we believe it cannot be questioned, it will be seen at once that individual liability incorporated in this bill would only draw money from that class of society whose livings are invested in Bank stocks, and who are entitled, by their helpless condition, to our guardian care and protection, and pay the same to Banks, in order to reimburse that money wnicu, m mis diii, tney are compelled to pay when any Bank for which they are security shall fail to pay its notes. We are persuaded that neither public security nor justice would be promoted by this; and as tho reciprocal security of the Banks for each other, in the mode pointed out, offers a speedy and suro remedy to the holder of bills on the failing Banks, we cannot believe that any oilier liability would improve, but rather pervert the security intended. In connection with the general subject submitted to us, we cannot forbear presenting to the Senate a suggestion, hearing with much force upon any plan which the Legislature may adopt for the regulation of the currency: The precious metals, which must be the basis or any safe circulating medium, as already shown, must be produced through the medium of trade, by any community not supplied with thorn from domeslio mines. Hence arises at once a striking difference in the situation of communities in regard to the supply of coin, when from any cause it may be needed. in a country whose resources exist in manufactures or commerce, chiefly or entirely, in any ease of a deficiency in coin for its ordinary purposes, as the exports of such community are confined to no particular period of the year, the return cargoes will, whenever a demand for coin requires it, consist niore or less of the precious metals, as, in the event supposed, the latter wilt be moro in demand thin merchandize; and thus quick and frequent supplies are obtained. In a country, however, purely or chiefly agricultural, as Oliio, where tne articles for exportation consist mainly of the annual crop of the country, if a deficiency of coin occur, from a drain lo pay a balance or trade against us, that deficiency must continue until a new crop is brought into market and its proceeds are returned. This peculiarity common to the whole West and South western portion of the Union, will always make it more difficult for us to maintain specie payments in times when there shall be for any cause a foreign demand for coin, than for those Mates whoso resources are ound chiefly in commercial and manufacturing pursuits. It is in this intermediate time between the sale of one crop and the exportation of another, in the event ot a demand Tor coin, that a credit in the State, founded on its coming resources, is wanted lo maintain the stability of prices and supply by a sound paper currency, the temporary want of the precious metals. It is just at such periods when coin eagerly sought for to pay dobte itbroad is drawn from the ordinary channels of circulation and becomes a merchantable commodity, ruther than (ns in common times) a measure of value. When the ordinary daily small transac tions ol society cannot bo supplied, then small noles, whether we will or not, begin to circulnlo freely from necessity. It is in such a crisis, not at all uncommon, that society finds itself compelled to adopt some representative of value of small denomination other than current coin. Il then becomes a question whether this supply shall bo furnished from a soureo entitled to confidence within our own borders, or whether, hy adhering blindly to a dogma which promises in theory some fancied good hut never realizes it in practice, we shall allow this currency to grow up ngninst our laws, or rush in upon us front abroad as it now docs in despite of our complaints and theories, and even our positive statutes.Small bills, issued by sound Banks at home, are plainly preferable to the non-descript tickrli of domestic and foreign urigin, which now take place of every other change in our towns and cities, especially on ihe borders of our Slate. Again, it is obvious that issues of small bills, furnishing change for the dealings of every day's occurrence by supplying Ihe place of specie, when the latter is in demand, tends greatly to aid both Banks and pcoplo in such a crisis. It is worthy of remark, that the Banks of New England havo always issued small bills, and they have never suv pended specie payments generally since the Rev. olutionary War, until, as a measure of self-defence, they did so in 1837, when suspension took place in all the States around them. New York, at one time, forbid the issue of small bills, but a little experience was sufficient to cor rect the error with a people so proverbially sagacious in all matters touching their pecuniary concerns, and they at onee retraced their steps by a repeal of the law. Since the restoration of the power to issue small bills, New Yorkjs able to maintain specie payments as does New' England, where small bills are not only tolerated but expressly authorized by law. Pennsylvania, on the oth-er hand, has forbid her Banks from issuing small bills under any circumstances', and with her large-capital, her industrious population, and all her manufacturing, agricultural, and commercial wealth,, is unable to maintain longer than two weeks the struggle to return lo specie payments. If we look at the amount of specie in the Banks and paper in circulation in those stales where the Banks have the right to issue small bills, and compare these-with the- condition of the Banks in those States where the issue of small bills is forbidden by law, we shall see at once the influence which this feature of any banking system exerts. Take the following states as an example: In 1830, the latest date at which we could find a correct table of Bank circulation, we have the following result: In Maine, with a specie capital of $303,605, they have a circulation of 92,030,640, a fraction under 97 to one on the Specie in their vaults. In New Hampshire, with s specie capital' of 187,901 dollars, they have a circulation of 1,-510,601 dollars, a fraction over 98 to one for every dollar of specie in their vaults. In Vermont, with a specie capital of 157,033 dollars, in specie, they have a circulation of 2,043,843 dollars' in paper, a fraction over 913 to one for every dol lar of specio in their vaults. In Masachusetts they have 2,304,624 dollars in specie, with a circulation of 90,400,412, or a fraction under 94 to one on every dollar in specie in their vaults. In New York the Banks had in specie capital 0,002,708 dollars, and-a circulation of 10,373,149 dollars in paper, or a fraction under 93 to one for every dollar of specie in their vaults, In these states the Banks ail have the privilege of issuing "small bills, and have sustained themselves in specio payments' throughout the present embarrassments in our monetary affairs. We will now look for a mo ment at the situation of Ohio and Pennsylvania.- In Pennsylvania the Banks had a specie capital of 97,435,820 on which they had a circulation of 917.360,772 in paper, a fraction under 92 50 for every dollar of specie in their vaults. In Ohio the Banks had a specie capital of 92,- 004,055, and a circulation of 90,885,263 of paper, or a fraction under 92 25 for every dollar of spe cie 111 their vaults. In these states the laws prohibited the circulation of any Bank notes under five dollars, and notwithstanding they had irt 1830 a much lurgvr specie basis for the amount of their circulation than either of the states above-named, these Banks have been exhausted and enfeebled in such a manner that they are totally unanie to nllord any relief to the business operations of the country. . If the minority of the Committee shall be found right in the views they have submitted as to the general bearing and tendencies of Ihe bill they present, then they reel an assured confidence that the Senate, regardless of minor and comparatively trivial objections to its details, (if such there be,) will give it their support and clothe it with the sanctions of law. It cannot be concealed from ourselves, and certainly it is not from our constit uents, that our policy heretofore on this great sub ject has not been fruitlul in good to the interest of Ihe Slate. But whether the present depressed condition of all branches of industry he attributable to mistaken legislation, or the emharsssment of 1'ie times, or untoward events, or the dispensa tion or an inscrutable Providence, one fact is apparent to all, the country looks to its selected servants in the Legislature for a system of laws-adapted to its present condition. If the ever va-- rying situation ol the people does not call fur a corresponding adaptation of laws, why are we called to the Capital annually for a qnarlcrof a year, lo make laws for the State! The people have not sent us here to u-onairate a creed bv ar gument, or to con over and recite to best advan tage the arguments on either side or some mooted point in the science of political economy. Ours is a people happily of laborious habits and plain practical sense. Tliey will not sacrifice their interest to the be lief of some refined speculation or newly discovered theory, which is shown them in the distance, far from the realities of I1I0 snd or business, and exciting alarms in the shadowy regions of a trans cendental philosophy. Ihe poor mechanic, or the tenant of a small farm, will not believe us when we tell him that it is better for posterity that the constablo should sell his last cow for half piice, than that hank notes should be issued by a corporation, whereby his property might have been saved and his children led. Nor have the people failed to implore the Legislature to ad. 1 hey have not, in this day of their trials, allowed us to go forward in our duty impelled only by the general and endorsed obligations of tho representa tive loins constituents. I hey have in strong and yet respectful and confiding tonus, petitioned us, and in many instances pointed to the specific thing they wanted. With a view to ascertain how far the various plans suggested had been approved or condemned by this mode of expression of the pop ular judgment, we have carefully examined the petitions presented during this session, touching the subject of Banks, and find the following lo be the result: Petitions fora State Bunk, 4.157 signers; Nye's Bill, which is the same thing, 1,003 signers; Safety Fund, 453 petitioners General Banking Law, 8 petitioners; Individual Liability, 008 petitioners; remonstrance against the issue of Post Notes, 408 signers; petitioners for issuing Post Notes, 110; no specific plan of Dunking, 07 petitioners. From this summary il will be seen that we have in the bill now presented, a verdict of the people in its fmur, if petitions are to be respected as expressions of the publio will. This has in some degree fortified our judgments in the conclusions which we have been obliged to come to, from an examination of Iho whole subject. Under a full conviction, at all evenls, of having applied our unbiased understandings to the subject the Senate has been pleased to refer to us, with a most anxious wish lo arrive at trulh, we cheerfully, and most respectfully submit the result to those whose province it is to correct us if in error, and whoso pleasure it will be to adopt our suggestions, should they be such as are likely to promote the true in tcrest, present and prospective, of our common country. JOSEPH VANCE. JOHN L. GREEN. E. N. SILL.

State ile Jo'ttrttitL VOLUME XXXI. COLUMBUS, SATURDAY, MARCH 20, 1841. NUMBER 41; REPORT OF THE MINORITY OF THE COMMITTEE ON BANKS AND THE VUURENCY. In SitiiTt, Thursday, Mabch 11, 1841, Mr, Vakci, from the minority 0 the committee 011 Duika and the Currency, made the following report : The undersigned, members of the committee on Banks and the Currency, ask leave to report: That they entered upon the duty assigned them with their fellow-members of the committee, with 8 fixod determination to concede to others differing with them, everything, when such concession did not require the surrender of principles of vital importance, and in a spirit of becoming dofcrence to such arguments as might be offered to convince them of errors, from which they did not presume to hold themselves more than others exempted. The great importance of the subject, was well calculated to create diffidence, and distrust in opinions previously formed, when the mind was left to its own speculations, unassisted by the light of long experience; and the public demand for prompt and decisive legislation, furnished a controlling motive to sacrifice all minor differences of opinion to the end of establishing by law a safe and practicable system of banking. The undersigned were farther prompted to an eager desire for safe and harmonious action on this subject, by theconsideration that the present condition of our country, more than at any former period, invokes a spirit of true and unbiased patriotism to its relief. The subject which the Senate has confided to the committee on Banks and the Currency, has been, in almost every State in the Union, a prominent topic of discussion, and in many instances has, in its various aspects, formed the question on which political parties have been divided. In the angry controversies of political partisans, it was impossible to govern the contest, nt all times, by the calm judgments of the understanding. Extremes prejudicial to the abiding interest of the country, in our opinion, have often characterized legislation upon this subject, which, perhaps, of all others, should be, for the benefit of the country, least subject to change, and especially to change of a sudden character to which, in the nature of things, business operations, and the labor and production of the people, could not be made to accommodate themselves without great and inevitable loss. In the progress of the public discussions which the question has undergone, every theory of currency, and every question of political economy in the remotest degree associated with it, have been reconsidered, and the grounds on which rested principles that have been the basis of legislation and policy to the most enlightened nations of modern times, have been questioned with freedom, and in many instances, with that stubborn self-will which is but too often the characteristic quality of wild, empirical speculation, regardless of facts, and uninformed by the teachings of experience.It has even been assumed, that the interest of a State or community, in the present condition of the world, would be promoted by the destruction of all credit, whether furnished by Banks or indi viduals; that we should go back to the barter of one article for another, which the necessities of an infant or barbarous state of society impose or at all events, the sale of commodities, and the exchanges of commerce, should be effected only through the medium of the precious metals. This latter, while left to work its way to tho minds of the people as theory, has not wanted advocates of greater or less pretensions to legislative sagacity. In the opinion of the undersigned, it is the slight approximation to the realities of this theory in practice, that has brought the people of this State, without distinction of party, to unite in the general wish for a safe and liberal system of credit, having for its medium Hanks of circulation, guarded by such restrictions as past experience has shown to be useful. The notion that Banks of circulation have the direct and inevitable effect of banishing from the country the universal measure of value, gold and silver coin, has been often propagated, with a sincerity and vehemence which carried to superficial thinkers a conviction of its truth. However plausible tho arguments at first view may seem, which tend to prove this assumption, it is only necessary to survey slightly the grounds on which they rest, to see their fallacy. It will not be denied that coin, whore it is not furnished from mines at home, must be brought in by trade with those portions of the world where it can be had in exchange for other commodities nor will it be controverted, that trade, and the production ot commodities Tor sale, are not merely promoted, but actually brought into life by the use of money, either in the shape ol the precious metals, or by some other common representative ol value. The extent of the production arising from labor, in any country where there are no disturbing in fluenccs, will in general be lound to be measured by tho amount of money whjch is in tho country employed in rewarding labor and facilitating the exchango 01 its production. In any country, therefore, when from any caiiso the metallic currency is dchcicnt, and that deli ciency is not aided by paper of good crodit, labor, failing to find its proper reward, ceases to produce, commerce by consequence languishes, nnd the export trade of such community will inevita bly fail to meet its imports. On the other hand, when a deficient metallic currency is supplied by a paper credit well foundud, activity is given to trade, labor is stimulated, production of commodities for sale is increased, and these last, being carried into the commerce of the world, return in the shapo of the precious metals to the extent re quired for the convenient transaction of commer cial business. Taking into view, therefore, these facts, it may bo safely assumed that the quantity of money which any pcoplo shall possess, in general will be measured by the amount of their production compared with their consumption, and the aid which a free and full circulation shall give to the productive powers of the country. If, then, in our country, we are to look to trade and com morce for the precious metals, and admit, what seems to be incontrovertible, that Hanks and credit are, if not actually indispensable, at least in geno- ral tho only practicable agents of trade, we are led to the conclusion that Banks of discount and circulation, instead of banishing coin from the country, rather invite it; and when, from unfavorable balances of trade with foreign States the amount of coin is reduced below the healthy standard, Banks, by stimulating industry, and giving uuuvuy 10 dusiiicsp, cxeu a must import out agency in restoring such balance, and bring' ing back the precious metals, through that com morce which they create and carry on. It has been one of the ureal objections to Banks with some, that the facility with which credit is obtained from them, gives scope to a spirit of wild speculation, and an adventurous and hazard ous trade, productive of bad results to the business and morals of society. To this it may at once be answered, that the same credit furnished by individuals, would produce the same results: and it may be added with truth, that Banks are not more prone than are isolated individuals, to extend credit to the reckless, or furnish means ol enterprise to the unworthy; on the contrary, as the whole business of banking, and its success, is dependent on the punctuality of its customers, Hanks, from an obvious necessity, are taught to look narrowly into the business character and prudence of those lo whom they give credit. 1 he data lrom which the loregoing objections are derived, are to be found chiefly in the history of Banks in the West and South-west during a period of twenty-five years past. It must be conceded by every one even superficially acquainted with the nature and use of such institutions, that they, being the offspring of trade and tho helps and handmaids of commerce, could not exist, with a safe and profitable business, in a country newly settled, with a sparse population, engaged almost exclusively in agricultural labor, the products of which would be mainly consumed by the pro ducers and emigrants, whose wants were of course supplied by the limited productions of their newly adopted country. It cannot be denied, too, that the safeguards and necessary restrictions on banking business, have been too often overlooked in the establishment of these institutions in the West and South-west; and above all, the imper fect notions of a people so little acquainted with the nature of trade, either in money or commodities, would lead as well to multiplication of Banks beyond the wants of an infant community, as to an insecure and hazardous course in their management. Hence it will be found, that the losses so often computed and greatly magnified by either the total insolvency of Banks, or by the depreciation of their paper in times of total or partial suspensions of specie payments, have occurred chiefly in the West and South-west, and exactly in those places where population was not dense, and where, by consequence, capital had not accumulated to any considerable extent, nor trade as yet found healthy, constant and active occupation. Thus it will be found that the losses of the United states Hank, from the year 1817 to the year 1837, were not quite two-thirds of one per cent, per annum, and that three-fourths of the whole loss occurred in the first four years of its existence as a Bank, one fourth part of which was in the states of Kentucky and Ohio. When we look, however, to the older portions of the Union, whero capital has accumulated, trades have multiplied, and the pursuits of the people become more diversified, so as to require constant and active exchange of commodities, we Una a very dillcrcnt result. Taking nine of the older Slates, including New England, New York, New Jersey, and Pennsylvania, with a Bank capital of seventy-two mil- ions of dollars, from the year 1811 to 1 8:10, the losses by Bank failures, including losses by stock holders, is, it is believed, truly estimated at one half of one per centum per annum on the capital employed; which, including a portion of the capital of the United States Bank, is estimated at seventy-two millions, as above stated. If we throw out of tins computation, the losses which fell on stockholders, it is computed that the entire loss to the bill holders, depositors, and holders of drafts and checks, during the period above stated, did not, in the nine States mentioned, exceed ono four hundredth part of one per cent on the amount. From which it follows, that the risk in such business, in the States abovo mentioned, was, for a period of about twenty years, about equal to one dollar in every forty thousand. When we learn from the same sources, that the losses of Banks by failures of individuals dealing with them, have been much greater than those of individuals from the Banks, it should furnish us with some instruction on the much contested point of the relative safety and punctuality of corporations and individuals. If tho foreeoinir views arc correct, It will fol low that the past history of banking in the West and South-west is no criterion by which to deter mine its future results and usclulncss, but only furnishes the great and important fact for consideration; that is, that in Ohio at least, we have advanced from a population of 1 few thousand, scattered over the whole State, all engaged in agriculture or in a very few rude attempts at the mechanic arts, to a population of more than a million and a half, with pursuits covering, to a limited extent, most of the useful and many of the ornamental branches of manufacture; and by our agricultural productions, furnishing nil tho staple articles of our own subsistence, and an annual surplus for export, which, at the lowest esti mate, does not fall short or twenty millions or dollars. When it is remembered that within a period of the last fifteen years, Ohio has expended fifteen millions ot dollars on canals and roads, all de igned to facilitate tho transportation of her own productions to market, ns well as to cheapen tho cost of commodities imported to her consumers, and some of theso great highways of trade are at this moment producing to tho Slate 0 per cent, per annum on their cost, it will at once bo perceived that our condition has totally changed within the last twenty years, and is rapidly assimilating to the character of those commercial States where Banks have profitably existed as the necessary agents or business, and been conducted with perfect security to the public. Another, and in the opinion of the minority of the committee, a most conspicuous proof of the improved capacity of the State for managing and sustaining banking business, is to be found in the history of our Banks for the last four years. 11 is well known that a suspension ol payment by the Eastern Banks in 1837, was followed by a similar courso by the Banks of Ohio; that when the former resumed payment in 1838, Ohio followed with prompt alacrity by tho payment of all demands in specie. When another suspension took placo in the East and South in 1830, our Banks in Ohio, as a measure of necessary self-defence to themselves and tho pcnplo, wero inclined also to suspend. At this point, the legislature interposed, and denounced tho forfeiture of charter by a very rapid process, and a sudden transfer to agents of the law of all the effects of the Banks which should refuse to redeem their notes with specie on demand. By another lnw, heavy penalties wero imposed on all such Banks as should fail to keep on hand one dollar in gold or silver for every three dollars of their notes in circulation. Thus the Banks of Ohio were compelled by their own Legislature to rcdeom their own notes with specie, while the Legislatures of the adjoining States would not permit them to enforce the same eoure upon Banks within their respective jurisdictions. Ctrey on the credit ijitem of Frtnce, Greet Britain ml w united sutei, p. so. The inevitable result of this State of things was to raise Ohio Bank notes to the value of spe cie; to drive them out of circulation, and through Collectors and Brokers, to force them in upon the Hanks, to draw from their vaults a corresponding amount of specie, which took its way to those States around ns, from whence our own Banks and citizens holding the paper of those Banks, could obtain no specie in return. This process (forced on bur Banks by the joint operation of the two laws above adverted to) reduced our Bank circulation, in one year, from (8,300,1-11 80 to $4,600,080; and the specie in the vaults of our banks, in the same time, from 92,002,642 10 to 1,355,500 17. I he prejudicial influence of these laws upon the interest of Ohio, is too palpable to require a moment's consideration, and their injustice too plain to need an illustration. So apparent is this view of our policy to every reflecting mind, that those differing most widely on every other topic connected with public law, agree in their deep and decided condemnation of this. Our citizens and Banks are compelled, under heavy penalties, to pay their debts to neighboring Slates in coin, while we hold claims against them, it may be for a corresponding amount, which they, at the moment of receiving payment from us, tell us they will not pay. Such policy, if applied to the dealings between man and man in our own State, would compel one man to pay a promissory note to another while- holding that other's promise for the same sum, and yet protect the latter from any enforcement of his engage ment. What man in business could abide the requirements of such a law? The feelings of patriotic indignation, inspired by this suicidal policy, have been expressed in strong and em phatic language by the present Bank Commissioners of Ohio, seeing our own citizens pushed naked and unarmed into this war of capital and enterprise by our own Legislature, while those of other States are protected by their respective Legislatures with every shield their laws could invent. The Bank Commissioners declare that, by our own policy, we have "rendered Ohio the common plunder ground for those who were purchasing specie or making collections in the 11 estcrn states," let, under all these disadvantages, the Banks of Ohio have maintained, in general, a good standing, and at this moment, with few exceptions, enjoy the entire confidence of the people; yet it is obvious that in the end great sacrifices must be made to sustain the unequal conflict in which they are engaged. It is a fact well ascertained, that capitalists in other States collect the Bank paper of Ohio, and favored and invited by our laws, come to our Banks and make demand, so that they may re ceive the twelve per cent, penally for non-pay. incut, as this is obviously a higher rate of inter est than could be obtained on any investment in their own State, while the operation is attended with no hazard whatever. We, on the other hand, are by such a policy deprived of the circulation of our own Banks, and in its stead have the circulation of the Banks of other States whose laws lcgnlizo a suspension; and if our citizens bring suit against the Banks of such States, they have only tho common rate of interest at the end of the litigation. W 0 repeat that the good condition of tho Ohio Banks, under such unfavorable circumstances, furnishes the strongest evidence that Banks, properly organized, can be safely relied on for a safe and sound currency in Ohio, and we cannot refrain from expressing a hope that the present session of the General Assembly will not close without the adoption of some provision more equitable towards our own institutions, than the existing laws afford. After a careful consideration of the present con dition of the State, thecommitteo feel deeply im pressed with the necessity of adopting, with all practicable promptitude, a sound system of cur rency in Ohio. This system, to be useful, must be such as will offer sufficient inducement to capital to seek investment in it, while it must also offer suffi cient security to the public that it will maintain a good currency , for the uses of the people. The great contraction which has taken place within the last year in our circulating medium, has obviously operated to reduce the price oflabor.aa well as the market value of every production of the State. We have a State debt ot 913,100,172 already, the interest on which must be paid to its holders abroad semi-annually; this interest must be rjiscd by the tolls on our canals, and by direct taxation on the people; theso must bo produced in the shape of money, and this again must be raised by labor and by property. The amount of tho labor or property which shall pay this debt, therclorc, depends on the high or low prices which a large or small amount of money in the State shall estab lish as the value of property and tho price of la bor. Thus any considerable diminution in that currency which is received for taxes, by dimin ishing the price or that property or labor which is the only resource of the people, has the direct effect to increase the public burthens. If a bushel ol wheat, when the currency ol tho Stale was abundant and good, paid one dollar in taxes, then it is obvious that the great diminution of the money in circulation which has brought down the price of wheat to fifty cents per bushel, while it doubles the burthen of taxation to the tax-payer, has not at all increased the fund which is to pay our foreign debt. So that in this process or re duction of the currency, the people feel all tho oppression of a double tax, while, in fart, the Treasury is not benefited by the change. Hence, instead of adopting any system which looks to a further contraction, or in any manner approach to an exclusive metallic currency, tho minority of the committee have been impelled by every mo-live of patriotism and every consideration of pub- lio duty, to endeavor to present a bill which would inspire a fccline of security as well to the holders of slock in the Banks as to the holder of their notes; and thus refill the exhausted chan nels of circulation, and reanimato that confidence which will repel the spirit of hoarding and bring into active use all tho capital ol the country. To accomplish this great object an object not less the common desire ol every member 01 tne Sonato than it is tho imperious demand of Iho people of the Stalo we sought anxiously through tho various bills referred to the committee, for a system answering lo tho end proposed. After careful ond anxious comparison of the four bills committed, in all of which there are many salutary provision, we have been compelled to givo the preference to the bill coming from lhc4 House of Representatives, with the amendments proposed, which, while they do not alter the main and prevailing characterises of the bill, arc, in our judg ments, nevertheless well calculated to improve the system. The bill we propose, while it gives the State a present interest equal lo one twentieth pari 01 hip whole stock, and power to own, when it shall Btnk CommiiiioDen' Report, December, 1840, p. 8 k J. be convenient, an amount equal to one fourth part of the whole, provides, also, a safety fund, and thus unites the two characters of the "safety fund" and State Bank in the same plan. This, in our judgments, alone gives the bill we propose a decided preference over any other system or bill which the committee was called on to consider. The minority of the committee have no doubt that they have consulted not less the dictates of prudence than the universal wishes of the people, when they consider the security to bill holders as a primary and all-important feature in any well constructed system of banking. This great end being fully attained, it is obvious that it will, if not directly, at least incidentally, have the effect to give stability to business and secure the community against unnatural fluctuations. Whatever means shall operate to make the notes of the Banks good at the expense of those who issue them, will also superinduce a degree of circumspection, and insure a greater degree of fidelity in the management of the Banks thus liable. The bill now proposed, raises, in the first place, by levy on all the dividends of the Banks, a safety fund, which, judging from the past in general, of itself will be sufficient to meet any demand likely to arise for the payment of the noles of a failing branch. In the second place, it holds pledged for the redemption of the bills of a broken or suspended Bank the entire Bank capital of the State. Thus every Bank in the Stale being liable for tho issues of every oilier Bank, is, from motives of interest, constituted a sentinel to watch the business of every other Bank; and on the first appearance of mismanagement, will be prompted by the strongest motive that of self-protcclion to tako instant and ellcctive steps to check such misman agement. The process by which this remedy is allorded, as will be seen, is simple and summary through the Board of Control. In this way, every bill holder will know that he has the security of not less than ten millions of dollars for tho redemption of every note of either of the Banks, which he may hold. It occurs to us, that so largo a sum pledged for this purpose, under the supervision of a Board of Control part of whom will be elected by the Repre sentatives of the People, with the additional guard of legislative scrutiny whenever the General As sembly shall deem it proper, oilers a more permanent and effective security to the public than any plan yet adopted especially when taken in connection with the safety fund, as provided by this bill. If a Branch shall at any time fail, through ne glect in management or from fraud, the holders of its notes can, by this bill, compel their receipt 111 payment of debts to any other Branch, and the Board of Control are bound to place funds in a situation to take up all the outstanding noles of such Branch. The Board of Control, issuing all the paper, can always know what amount has been placed in the power of each Branch; and their report, to be made to the Legislature, will give full information to the people of the condition of every Branch of the entire system. When the bill now proposed shall be examined in all its parts, in reference to the ultimate security it affords to the holders of bank notes of any of the Branches of this system, it must result, it would seem, in a convic tion, that this great end of security to the public is accomplished with as much certainly as is at tainable in human affairs. It will be seen that no Branch, in the first place, can issue or circulate as money any note which has not been issued and lurmshed to such iiranch by tho Hoard or Control. The condition of each Branch being thus known to the Board of Control, unless the latter proves faithless to itself and the country, it will follow that the issues of the Branches will be confined within prudent and safe limits. The Board of Control we propose is, it is believed, so constituted as to insure both the knowledge and fidelity requisite to a proper discharge of the high duties assigned to them. Four of the Board are to be elected by the Brunches, and they, of course, ill be selected for their experience and know ledge in tho business over which they are to preside. As the currency is a matter of interest to every citizen, and of great and paramount public concern; nnd as the paper of the Branches is to be received everywhere in the State in the pay ment of taxes, unless otherwise directed by law, it was thought advisable to give the public, as such, a representation in the Board; and accord ingly, three or its members are to be elected by the General Assembly, in the manner pointed out by the bill. This last branch of the Board of Control will, of necessity, feel tho responsibility resulting from the nature of their constituency they will be the chosen of the people, to guard and protect them against every movement which the Banks might make from a desire to increase the profits of their business, or which might tend to endanger the currency, in which all have a common interest. If, however, this should fail to exert its proper and legitimate inlluence, the ever wakeful vigilance of the Legislature is provided with the ready means of correcting tho evil, by a scrutiny into the conduct of holh the Board of Control and the Banks, at any time, whenever suspicion might suggest its propriety. To insure a prompt exercise of this power, semi-annual reports, made under oath, of the doings of the Banks, are to he published; and these, it is not doubted, will furnish, as well to the friends of a good and well-secured paper rurrency as to those who from other motives may choose to look narrowly into their doings, full and ample means of awakening public attention to any mismanagement of their affairs. It is believed the limitations placed upon tho issues of the Banks, based upon the proportions fixed in the bill which their present nvnilablo means shall bear to their circulation, are safe, even according to the standard of those least favorable to a paper circulating medium. The condition of the Banks, in this respect, will at short intervals be laid bare to tho public eye; and in raso of any departure from the law, or the charter, in this respect, a personal responsibility is imposed upon the Directors under whose management such infraction of the law occurred. In addition to all these guards, accumulated thus far to 1 point, in quantity and severity, it might ba supposed stiffi-ricnt to satisfy the most timid disposition, or even those most anxious for the infliction of penalties upon either negligent or fraudulent delinquency, we have the superadded security of every Baiik in the State pledged for the redemption of the notes of every other Bank. This alone, it woi Id seem, would furnish am-plo security, unless the separate owners of the stock of some forty or fifty branches all combine to sacrifice their property, to the amount of at least ten, and probably fourteen millions of dollars. We have hero not merely the individual liability of the stockholder, but we have the security of a second person not at all interested in failing Branch, and pledge of his to an amount greater than any individual responsibility of the stockholders of any particular Branch. Thus it will be seen that the present bill, while it does not in the manner sometimes proposed introduce the principle of individual liability, does what in our judgment is the same thing, in a much safer and more equitable way it compels the stockholders of every Bnk iii the Slate to pledge all the stock they own as security for the good conduct, and the redemption of the bills, of the neighboring Banks; in which latter these sure-lies have no interest whatever, but over which, for this reason, through the common Board of Control, they are authorized to exert a salutary and only conservative power, very much like that which in law a surety may exert over his principal. However salutary might be the doctrine of individual liability of the stockholders, it will be seen at once that in a system like this it would not only be useless, but, if applied at all, it would operate with great injustice. The stock of each Branch being separate property, if the individual stockholders of a failing Branch were made liable, such liability could have no other effect than to compel individuals to reimburse to the Banks, (who by the bill are bound lo redeem speedily the notes of such failing Dranen,! tne money advanced lor that purpose. It would be a guaranty to Banks who are security for the failing Bank, and that guaranty too, in general, would fall upon individual stockholders wno had had no agency in producing the failure. Thus, afler a Bank had failed, and the other Banks, as is provided in the hill, had redeemed all the notes of the insolvent institution, the public is 'tisfied, no one has lost anything except me siocKnoiucrs 01 tne tailing Hank and the other Banks who have paid its debts. If, then, the individual liability of the stockholders of the failing Bank is enforced, it could only be to pay to the other Banks the amount which they had been compelled to advance. The particular class on whom this payment would fall, for the benefit of the surety Banks, we may con jecture with some approach to certainty, in the Knowledge we nave ol the many aged men, widows, trustees, guardians, and minors, who own stock in Banks, and who seldom have any active agency in their management. We have no particular or certain data on which to found an opinion upon this subject, but, from the best in- lormalion we have been able to obtain, there is at least one-half of the stock owned in the Ohio Banks, that belongs to females, minors, retired. and aged persons, who have not the least agency in cunuuciing uieir ariaira. If the foregoing be a tnie statement, and we believe it cannot be questioned, it will be seen at once that individual liability incorporated in this bill would only draw money from that class of society whose livings are invested in Bank stocks, and who are entitled, by their helpless condition, to our guardian care and protection, and pay the same to Banks, in order to reimburse that money wnicu, m mis diii, tney are compelled to pay when any Bank for which they are security shall fail to pay its notes. We are persuaded that neither public security nor justice would be promoted by this; and as tho reciprocal security of the Banks for each other, in the mode pointed out, offers a speedy and suro remedy to the holder of bills on the failing Banks, we cannot believe that any oilier liability would improve, but rather pervert the security intended. In connection with the general subject submitted to us, we cannot forbear presenting to the Senate a suggestion, hearing with much force upon any plan which the Legislature may adopt for the regulation of the currency: The precious metals, which must be the basis or any safe circulating medium, as already shown, must be produced through the medium of trade, by any community not supplied with thorn from domeslio mines. Hence arises at once a striking difference in the situation of communities in regard to the supply of coin, when from any cause it may be needed. in a country whose resources exist in manufactures or commerce, chiefly or entirely, in any ease of a deficiency in coin for its ordinary purposes, as the exports of such community are confined to no particular period of the year, the return cargoes will, whenever a demand for coin requires it, consist niore or less of the precious metals, as, in the event supposed, the latter wilt be moro in demand thin merchandize; and thus quick and frequent supplies are obtained. In a country, however, purely or chiefly agricultural, as Oliio, where tne articles for exportation consist mainly of the annual crop of the country, if a deficiency of coin occur, from a drain lo pay a balance or trade against us, that deficiency must continue until a new crop is brought into market and its proceeds are returned. This peculiarity common to the whole West and South western portion of the Union, will always make it more difficult for us to maintain specie payments in times when there shall be for any cause a foreign demand for coin, than for those Mates whoso resources are ound chiefly in commercial and manufacturing pursuits. It is in this intermediate time between the sale of one crop and the exportation of another, in the event ot a demand Tor coin, that a credit in the State, founded on its coming resources, is wanted lo maintain the stability of prices and supply by a sound paper currency, the temporary want of the precious metals. It is just at such periods when coin eagerly sought for to pay dobte itbroad is drawn from the ordinary channels of circulation and becomes a merchantable commodity, ruther than (ns in common times) a measure of value. When the ordinary daily small transac tions ol society cannot bo supplied, then small noles, whether we will or not, begin to circulnlo freely from necessity. It is in such a crisis, not at all uncommon, that society finds itself compelled to adopt some representative of value of small denomination other than current coin. Il then becomes a question whether this supply shall bo furnished from a soureo entitled to confidence within our own borders, or whether, hy adhering blindly to a dogma which promises in theory some fancied good hut never realizes it in practice, we shall allow this currency to grow up ngninst our laws, or rush in upon us front abroad as it now docs in despite of our complaints and theories, and even our positive statutes.Small bills, issued by sound Banks at home, are plainly preferable to the non-descript tickrli of domestic and foreign urigin, which now take place of every other change in our towns and cities, especially on ihe borders of our Slate. Again, it is obvious that issues of small bills, furnishing change for the dealings of every day's occurrence by supplying Ihe place of specie, when the latter is in demand, tends greatly to aid both Banks and pcoplo in such a crisis. It is worthy of remark, that the Banks of New England havo always issued small bills, and they have never suv pended specie payments generally since the Rev. olutionary War, until, as a measure of self-defence, they did so in 1837, when suspension took place in all the States around them. New York, at one time, forbid the issue of small bills, but a little experience was sufficient to cor rect the error with a people so proverbially sagacious in all matters touching their pecuniary concerns, and they at onee retraced their steps by a repeal of the law. Since the restoration of the power to issue small bills, New Yorkjs able to maintain specie payments as does New' England, where small bills are not only tolerated but expressly authorized by law. Pennsylvania, on the oth-er hand, has forbid her Banks from issuing small bills under any circumstances', and with her large-capital, her industrious population, and all her manufacturing, agricultural, and commercial wealth,, is unable to maintain longer than two weeks the struggle to return lo specie payments. If we look at the amount of specie in the Banks and paper in circulation in those stales where the Banks have the right to issue small bills, and compare these-with the- condition of the Banks in those States where the issue of small bills is forbidden by law, we shall see at once the influence which this feature of any banking system exerts. Take the following states as an example: In 1830, the latest date at which we could find a correct table of Bank circulation, we have the following result: In Maine, with a specie capital of $303,605, they have a circulation of 92,030,640, a fraction under 97 to one on the Specie in their vaults. In New Hampshire, with s specie capital' of 187,901 dollars, they have a circulation of 1,-510,601 dollars, a fraction over 98 to one for every dollar of specie in their vaults. In Vermont, with a specie capital of 157,033 dollars, in specie, they have a circulation of 2,043,843 dollars' in paper, a fraction over 913 to one for every dol lar of specio in their vaults. In Masachusetts they have 2,304,624 dollars in specie, with a circulation of 90,400,412, or a fraction under 94 to one on every dollar in specie in their vaults. In New York the Banks had in specie capital 0,002,708 dollars, and-a circulation of 10,373,149 dollars in paper, or a fraction under 93 to one for every dollar of specie in their vaults, In these states the Banks ail have the privilege of issuing "small bills, and have sustained themselves in specio payments' throughout the present embarrassments in our monetary affairs. We will now look for a mo ment at the situation of Ohio and Pennsylvania.- In Pennsylvania the Banks had a specie capital of 97,435,820 on which they had a circulation of 917.360,772 in paper, a fraction under 92 50 for every dollar of specie in their vaults. In Ohio the Banks had a specie capital of 92,- 004,055, and a circulation of 90,885,263 of paper, or a fraction under 92 25 for every dollar of spe cie 111 their vaults. In these states the laws prohibited the circulation of any Bank notes under five dollars, and notwithstanding they had irt 1830 a much lurgvr specie basis for the amount of their circulation than either of the states above-named, these Banks have been exhausted and enfeebled in such a manner that they are totally unanie to nllord any relief to the business operations of the country. . If the minority of the Committee shall be found right in the views they have submitted as to the general bearing and tendencies of Ihe bill they present, then they reel an assured confidence that the Senate, regardless of minor and comparatively trivial objections to its details, (if such there be,) will give it their support and clothe it with the sanctions of law. It cannot be concealed from ourselves, and certainly it is not from our constit uents, that our policy heretofore on this great sub ject has not been fruitlul in good to the interest of Ihe Slate. But whether the present depressed condition of all branches of industry he attributable to mistaken legislation, or the emharsssment of 1'ie times, or untoward events, or the dispensa tion or an inscrutable Providence, one fact is apparent to all, the country looks to its selected servants in the Legislature for a system of laws-adapted to its present condition. If the ever va-- rying situation ol the people does not call fur a corresponding adaptation of laws, why are we called to the Capital annually for a qnarlcrof a year, lo make laws for the State! The people have not sent us here to u-onairate a creed bv ar gument, or to con over and recite to best advan tage the arguments on either side or some mooted point in the science of political economy. Ours is a people happily of laborious habits and plain practical sense. Tliey will not sacrifice their interest to the be lief of some refined speculation or newly discovered theory, which is shown them in the distance, far from the realities of I1I0 snd or business, and exciting alarms in the shadowy regions of a trans cendental philosophy. Ihe poor mechanic, or the tenant of a small farm, will not believe us when we tell him that it is better for posterity that the constablo should sell his last cow for half piice, than that hank notes should be issued by a corporation, whereby his property might have been saved and his children led. Nor have the people failed to implore the Legislature to ad. 1 hey have not, in this day of their trials, allowed us to go forward in our duty impelled only by the general and endorsed obligations of tho representa tive loins constituents. I hey have in strong and yet respectful and confiding tonus, petitioned us, and in many instances pointed to the specific thing they wanted. With a view to ascertain how far the various plans suggested had been approved or condemned by this mode of expression of the pop ular judgment, we have carefully examined the petitions presented during this session, touching the subject of Banks, and find the following lo be the result: Petitions fora State Bunk, 4.157 signers; Nye's Bill, which is the same thing, 1,003 signers; Safety Fund, 453 petitioners General Banking Law, 8 petitioners; Individual Liability, 008 petitioners; remonstrance against the issue of Post Notes, 408 signers; petitioners for issuing Post Notes, 110; no specific plan of Dunking, 07 petitioners. From this summary il will be seen that we have in the bill now presented, a verdict of the people in its fmur, if petitions are to be respected as expressions of the publio will. This has in some degree fortified our judgments in the conclusions which we have been obliged to come to, from an examination of Iho whole subject. Under a full conviction, at all evenls, of having applied our unbiased understandings to the subject the Senate has been pleased to refer to us, with a most anxious wish lo arrive at trulh, we cheerfully, and most respectfully submit the result to those whose province it is to correct us if in error, and whoso pleasure it will be to adopt our suggestions, should they be such as are likely to promote the true in tcrest, present and prospective, of our common country. JOSEPH VANCE. JOHN L. GREEN. E. N. SILL.